Milk cartel accused of price fixing

The Office of Fair Trading has accused the big four supermarkets of colluding with dairies to artificially increase the cost of dairy foods.

The OFT estimated that costs of £270 million had been passed onto shoppers by Asda, Tesco, Morrisons and Sainsbury's, working with dairy processors Arla, Dairy Crest, Lactalis McLelland, and The Cheese Company. The supermarkets could now face fines of 'hundreds of millions'.

'We believe supermarkets have been colluding,' said Sean Williams, the executive director of the OFT. 'Consumers have lost out to the tune of hundreds of millions of pounds. Businesses should understand that where we find evidence of this kind of anti-competitive activity we will use the powers at our disposal.'

The OFT is now consulting with the supermarkets and third parties, and will decide whether to sue the retailers in December.

All the supermarkets maintain their innocence and said they would defend themselves.